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Monthly Archives: August 2017

Cannabis Licenses in California

The State of California is revamping the entire licensing process, as well as the available licenses, for cannabis businesses of all types. The interest of CA is in protecting the public, as well as coming up with a solid system for taxing the marijuana industry and businesses. The state has a very strong interest in making sure that the money from this industry is taxed and is used by the state.

Currently, there are existing medical cannabis dispensary licenses, and those will continue. However, there is a host of new licenses starting in 2018 for growers, testing facilities, transportation and for dispensaries (for both medical and retail sale).

Who issues Medical Cannabis Licenses In California?

The State of California created the Bureau of Medical Cannabis Regulation and Licensing. They asked that agency of the State to develop regulations in accordance with the Administrative Procedure Act. The CA Cannabis Bureay will also conduct research, and convene meetings of members of the public, people currently in the marijuana business, and even other state agencies to develop the regulations necessary to successfully implement a medical cannabis regulatory structure in California.

They intend to use the current alcohol license system in California, the standards used in California’s wine industry, and existing and current medical marijuana growers and dispensary permits, to build a new system for retail marijuana for sale to every adult in California.

What about people that have current Medical Marijuana Permits – will they require new medical recommendations?

Marijuana Hemp Cannabis

Under the new system, it is intended that any qualified patient who cultivates, possesses, processes, or transports medical marijuana exclusively for his or her personal medical use is not required to get a license. Since growth indoors limited to six plants, and possession for personal use is legal, it is not a major concern to California. Caregivers who provide care to five or fewer medical cannabis patients are also not required to be licensed.

When are the new marijuana licenses available in California?

Many thought that licenses would already be available for application at the time of the writing of this page (August 2017). However, the Board keeps pushing back the time period to release the procedures and regulations. Some say that information will begin to come out in October 2017, and the Board itself “anticipates that regulations will be developed by January 1, 2018” . Since the law requires licenses to be released on January 2, 2018, the January 1 date would be the latest that those licenses could be available.

Those that are interested in getting a license should get your information and business structure ready now (which includes incorporating, finding suppliers and a building location, and cleaning up your criminal record) rather than later.

How will cannabis businesses be licensed in California?

The new marijuana laws in California going into effect will create a dual licensing system between local cities and counties and the State. Your new business will be required to obtain a city cannabis permit, an Orange County cannabis permit, or both a city and county license, permit, or other authorization, before your business can apply for a state license.

What kind of cannabis business license will you need?

The type of license you need will depend on your business and what capabilities you desire. The Act limits the different types of licenses that one person may hold.

You can hold a dispensary license for marijuana, or a transportation license, a cannabis growers license, or a state testing lab license, but the law prohibits in certain cases you from holding more than one license. You can hold several of the same types of licenses (for example, if you have dispensaries in different locations), but are limited as far as holding different types of licenses.

How can you apply for a license from the appropriate agency?

None of the bureaus or departments in the State of California re issuing state licenses at this time., and they won’t be accepting applications for licenses until 2018.

The Bureau of Medical Cannabis Regulation has promised to give priority to existing medical cannabis collective operations, but under the new laws, you must get a city or county permit first and then apply for the State License. We recommend obtaining a location, a city permit, and then prepare (incorporate, and get suppliers and procedures ready for your location), so that you can be first in line during the rush of applications on January 2, 2017.

The bureau says that:

In issuing licenses, the Bureau will prioritize any entity that can demonstrate to the Bureau’s satisfaction that the entity was in operation and in good standing with the local jurisdiction by January 1, 2016, as required by the Act.

We can help contact your local government regarding the rules and requirements applicable to cannabis activities in your city or county.

How long will marijuana licenses or cannabis licenses be good for before they must be renewed?

California law requires each license to be renewed annually, so your license will be good year by year as long as it is renewed.

What if your city prohibits all or certain medical cannabis businesses?

If a local jurisdiction bans all or a specific form of medical cannabis business, then, under the law, a business is not allowed to operate in that jurisdiction. Until your city’s laws change, you will not be allowed to operate at all legally in your city.

How much will licensing fees for cannabis businesses cost?

Unfortunately, no one knows the answer to how much cannabis licenses will cost. In addition to being subject to taxation, each license will ave an annual fee. The various agencies have not determined what the fees for the state licenses that will be issued by the agencies will be, but they are expected to be several hundreds of dollars a year.

How profitable is a marijuana dispensary in California?

In order to calculate how much, on average, a medical marijuana dispensary can earn, you would have to look at the financial records. That depends on how many operating dispensaries there are in any particular area, city, or county, in California, and how much each dispensary earns, on average.

How many dispensaries are there in California?

Through June 30, 2016, 1,023 publicly disclosed medical cannabis sellers registered with the Board of Equalization (BOE) filed returns and remitted sales and use tax to the BOE. There certainly were more than that operating without filing taxes or registering themselves.

How much in sales taxes does the BOE collect from medical marijuana businesses?

Through June 30, 2016, $575,021,347 taxable sales of marijuana were reported to the BOE, and $50,507,006 was remitted in sales and use tax.

Calculation of marijuana sales and profit

That means that each marijuana dispensary license brought in an average of $562,093. Net profit would be lower, including staff salary and product and building or rent costs.

After taxes, the profit to each dispensary would be $512,722. Still a healthy profit for a retail business of any kind.

Future prospects of Marijuana and Cannabis Product Sales

As there is more competition in the market, more dispensaries should each take in less, if the demand remains the same. However, there are substantially more retail customers for marijuana than just the previous medical marijuana patients. That, plus new products, including edibles, means substantial upside on the demand part of the equation.

Cannabis cultivation licenses, laboratory testing licenses, and the CBD/THC infused products/concentrates sectors are particularly lucrative, with 29% of wholesale growers and 27% of infused companies saying that they are “very profitable.”

For retail operations, the cannabis dispensary business makes more money than average for retail businesses. According to the 2016 Marijuana Factbook, a store that sells either medical or recreational cannabis or marijuana of any type earns on average $974 per square foot in revenue, topping Whole Foods, whose 431 stores earn an average of $930 per square foot.

So how profitable is a marijuana dispensary in California? Cannabis sales are expected to skyrocket to nearly $23 billion in 2020, nearly triple from this year, according to ArcView Market Research and New Frontier, a data analytics company that focuses on the industry.

Given that, a tripling of net profits from current amounts could mean that each dispensary in California could be making over one billion dollars per year, making it a very profitable retail business indeed.

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Contact us today to get started with your profitable marijuana business. We can help you start your business right.

Can you get a cannabis license with a criminal record?

If you are interested in applying for a license to start a business in California’s new cannabis or marijuana industry, you may worry that a criminal past might hurt you from being approved for any of the following California cannabis licenses:

Mobile cannabis or marijuana business;

Marijuana dispensary;

Cannabis testing lab;

Marijuana growing operation; or

Cannabis wholesale distribution.

The State of California must approve all cannabis licenses in Calfornia, and California requires that you pass a criminal background check before you can be granted a license.

What does the State of California state regarding what types of crimes may disqualify you for a CA Cannabis License?

The State of California only addresses this in a question and answer by stating, in question and answer format:

Q. If I have a criminal background will I be denied approval for a license?

A. According to the Act, the Bureau may deny a license to an applicant who has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made.

What crimes are “substantially related” to the cannabis application?

The State doesn’t answer that question directly. But for cannabis licenses, the State has an interest in two types of crimes – those that show 1. An inability to follow rules, or being unfit for the business; and 2. An avoidance of taxes or an inability to follow the rules.

1. An inability to follow rules, or being unfit for the business.

The inability to follow rules doesn’t just refer to selling marijuana during the time period that it was illegal in California. The State of California usually, for many types of professional licenses, wants to protect consumers. That means that they look especially seriously at “crimes of moral turpitude”. A crime of moral turpitude, from the point of view of the state, means that you might be more likely to be dishonest. Those crimes may include the following types of convictions:

Convictions for fraud;

Convictions for theft of all types (shoplifting, burglary, embezzlement from an employer, robbery, or theft from customers)

Convictions for the types of crimes that are serious enough to be “shocking” to the reasonable person, such as the following: murder, voluntary manslaughter, kidnapping, robbery, and aggravated assault.

2. An avoidance of taxes or an inability to follow the rules

The State of California is highly interested in not only regulating this new industry but also in the tax income it is expected to bring. As a result, any indication that you are behind on filing taxes or paying taxes, or any efforts to avoid taxation, are looked at as especially seriously by California’s license issuing authorities.

Can you get a cannabis license with a DUI?

A DUI is not a crime of moral turpitude like the above and does not involve taxes due to California.

As a result, a single DUI is unlikely to prevent someone from becoming licensed for Cannabis business purposes in California. DUI is the number one crime in California, and so it is very common, and many applicants will have a DUI on their record.

More than one DUI, however, could indicate an alcohol or drug problem (especially if it was a Drug DUI or DUID), which for other types of licenses the state has looked especially closely at. That doesn’t mean that the license may not be approved, but there may be a probationary period or a requirement that counseling or a program be completed.

Orange County DUI Checkpoints August 25-26, 2017

As law enforcement prepares for the busy OC Labor Day weekend, DUI checkpoints are announced for the weekend of August 25th and 26th, 2017, for Orange County, California, in the cities of Tustin, Mission Viejo, and Anaheim. The specific information on Orange County DUI Checkpoints August 18, 2017, are as follows:

Tustin DUI Checkpoint

The Tustin DUI Task Force of the Tustin Police Department will be conducting an Orange County DUI Checkpoint on August 25th, 2017, from the hours of 7 pm to 3 am. While the exact location has not yet been announced, our Orange County DUI Lawyers have noticed a pattern – most prior DUI checkpoints have been on or near the Tustin Marketplace, near or around Jamboree Road, Irvine Boulevard, or at Newport Boulevard between the 5 freeway and First Street.

Are Orange County DUI Checkpoints Legal?

California courts have upheld DUI checkpoints as legal. DUI checkpoints are constitutional under the California Constitution because the California Supreme Court considers them administrative procedures, rather like airport security, and therefore an exception to the rule that a police officer must have probable cause to initiate a traffic stop.

Are the Orange County DUI Checkpoints August 25-26, 2017, effective?

The main case in California regarding the legality of sobriety checkpoints is Ingersoll v. Palmer. The Ingersoll case sets out the following eight guidelines in order for the security checkpoint to be considered constitutional:

More experienced supervisor police officers must make all decisions in the DUI checkpoint;

The criteria for stopping motorists in a DUI checkpoint must be neutral, such as “every third car”, rather than be “I think that person looks guilty”;

The DUI checkpoint must be reasonably located;

Adequate safety precautions must be taken for every DUI Checkpoint;

The DUI checkpoint time and duration should reflect good judgment;

The checkpoint must exhibit sufficient indications that it is a police operation;

Drivers should be detained a minimal amount of time during the DUI Checkpoint, and

All DUI Checkpoints must be publicly announced in advance, which is why the police send police press releases regarding DUI checkpoints. It’s a legal requirement.

If police fail to comply with these criteria when the DUI checkpoint is set up, then the DUI checkpoint can be challenged and could lead to any results of the DUI checkpoint being suppressed, which is one way how to dismiss a DUI case.

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Contact us todayif you have questions about any of the Orange County DUI Checkpoints August 25-26, 2017. As among the best DUI lawyers in OC, we can help you if you or a loved one were arrested for DUI anywhere in Orange County.

Avoiding monopolies with California cannabis licenses

The current issue (September 2017), of GQ magazine, has an interesting article on the legal structure and secrecy of big companies that are getting into the cannabis business. As you may know, the State of California is about to issue cannabis licenses in California for those that want to become marijuana growers, retailers, wholesalers, lab testing facilities, and mobile delivery services for marijuana. The State of California currently does not allow certain licenses to be held if you already have a cannabis license. That is, according to the appropriate departments in the State, to prevent vertical integration, under the fear that large tobacco companies can come in and control the growing, wholesaling, and retail distribution of marijuana, as they did with tobacco.

The State of California currently does not allow certain licenses to be held if you already have an existing cannabis license. That is, according to our Orange County DUI lawyer, to prevent vertical integration, under the fear that large tobacco companies can come in and control the growing, wholesaling, and retail distribution of marijuana, as they did with tobacco.

The GQ article mentions one company, BioTech Institute, as follows, as one company that has been aggressive in applying for (and paying for) patents on specific strains of marijuana:

If the rest of its patents get approved, and they hold up legally, BioTech Institute might have a near-monopoly over crucial intellectual property for a commodity whose soothing, mind-altering effects make it more valuable than wheat. Unless the hustlers in the rest of the cannabis industry take a break from shoving one another aside to work together against the patents, BioTech Institute could have the market cornered in a few years. The company could control access to a plant that has been shown to reduce tremors in Parkinson’s patients, to help veterans stop dreaming in flashbacks, to relieve the nausea of anyone undergoing chemotherapy. They could charge whatever they wanted.

One cannabis business lawyer, Gary Hiller, has been helping investors as the lawyer who runs Phytecs and BioTech Institute, according to the article.

“We have got to protect the small cultivators as well as entrepreneurs who don’t have access to millions of dollars.”

To that end, the Adult Use of Marijuana Act – as the California initiative is called – includes language meant to protect the industry “against monopolistic practices” for five years, noted Newsom, the highest-ranking state politician to support legalization measures.

For example, any adult-use cultivation business that operates an outdoor facility larger than one acre or an indoor building that exceeds 22,000 square feet would be prohibited from getting a license until January 2023. All legal rec growers prior to that date would have to fall within those limits.

Under the proposed law, state licensing authorities also would be required to consider whether issuing a particular applicant a permit might stifle competition or create a monopoly.

Newsom stressed the need to ensure minorities have a place in the cannabis industry, and he also said existing medical marijuana businesses that have proven they can operate responsibly will have a leg up in obtaining a recreational license.

“For those who have been good actors in the state of California, you’re going to be prioritized,” he said.

Orange County DUI Checkpoints August 18, 2017

DUI checkpoints are announced for the weekend of August 18, 2017, for Orange County, California, in the cities of Newport Beach, Mission Viejo, and Anaheim. The specific information on Orange County DUI Checkpoints August 18, 2017, are as follows:

Newport Beach DUI Checkpoint

The Newport Beach DUI Task Force of the Newport Beach Police Department will be conducting an Orange County DUI Checkpoint on August 18, 2017, from the hours of 8 pm to 3 am. While the exact location has not yet been announced, our Newport Beach DUI Lawyers have noticed a pattern – most prior DUI checkpoints have been on or near Jamboree Road, near Santa Barbara Avenue at Fashion Island, or at Dover Avenue and Pacific Coast Highway. Some in the past have been on PCH between Newport and Jamboree, on Finley at Newport Boulevard, or on the Balboa Peninsula.

Anaheim DUI Checkpoint

The Anaheim DUI Task Force of the Anaheim Police Department will be conducting a DUI Checkpoint on August 18, 2017, from the hours of 7 pm to 3 am. It will be located on Lincoln Avenue, between Magnolia and Brookhurst Avenue. Our Anaheim DUI Attorneys are available if you have more information about this Orange County DUI checkpoint.

Mission Viejo DUI Checkpoint

The Orange County Sheriff’s DUI Task Force has a Mission Viejo DUI checkpoint on August 18, 2017, from the hours of 7 pm to 3 am. The exact location has not yet been announced, most prior DUI checkpoints have been on or near Alicia, Oso, or Crown Valley.

Are Orange County DUI Checkpoints Legal?

California courts have upheld DUI checkpoints as legal. DUI checkpoints are constitutional under the California Constitution because the California Supreme Court considers them administrative procedures, rather like airport security, and therefore an exception to the rule that a police officer must have probable cause to initiate a traffic stop.

Are the Orange County DUI Checkpoints August 18, 2017, effective?

The main case in California regarding the legality of sobriety checkpoints is Ingersoll v. Palmer. The Ingersoll case sets out the following eight guidelines in order for the security checkpoint to be considered constitutional:

More experienced supervisor police officers must make all decisions in the DUI checkpoint;

The criteria for stopping motorists in a DUI checkpoint must be neutral, such as “every third car”, rather than be “I think that person looks guilty”;

The DUI checkpoint must be reasonably located;

Adequate safety precautions must be taken for every DUI Checkpoint;

The DUI checkpoint time and duration should reflect good judgment;

The checkpoint must exhibit sufficient indications that it is a police operation;

Drivers should be detained a minimal amount of time during the DUI Checkpoint, and

All DUI Checkpoints must be publicly announced in advance, which is why the police send police press releases regarding DUI checkpoints. It’s a legal requirement.

If police fail to comply with these criteria when the DUI checkpoint is set up, then the DUI checkpoint can be challenged and could lead to any results of the DUI checkpoint being suppressed, which is one way how to dismiss a DUI case.

Marijuana and California State Law

Marijuana and California State Law: A growing number of states are defying the federal marijuana ban, not only by rewriting their own laws, but by actively cooperating with marijuana growing, processing, and use. Many contend that pot should be a state, rather than a federal, concern. California made the sale legal of Marijuana and California State Law reflects that by making a cannabis business license available under state laws for sales to patients and the general public.

There are 17 different types of California marijuana licenses based on the type of business activity involved. The following types of business are permitted under the CA MMRSA law:

Marijuana Cultivators or Growers (Cultivars) with four total acres of growing area,

Marijuana Manufacturers

Marijuana Testing labs

Marijuana Retail dispensaries

Marijuana Distributors and

Marijuana Transporters.

Each of these types of business must acquire its own license as provided in Section 19300.7 of the California Business and Professions Code. For example, a Type 1 license will be allowed for small specialty outdoor operations, whereas a Type 4 license is required for cultivation in a nursery. A Type 6 or 7 license will be required for manufacturers, while a Type 8 license is required for those engaged in testing. Type 10 and Type 10A are for dispensaries. Type 11 is a license for distributors, while transportation businesses must apply for a Type 12 license.

Licensees may usually hold licenses in two separate categories, but only in certain combinations. All cultivators and manufacturers must send their products to a Type 11 licensee in order to obtain quality assurance, and Type 11 licensees must submit marijuana products to Type 9 laboratories.

Federal Law and Marijuana Legality

The U.S. Supreme Court has ruled in Gonzales v. Raich (2005), the court held that under the Constitution, Congress may use its Commerce Power to ban even “window box” medical marijuana, whether permitted under state law or not.

The Commerce Power derives from two constitutional provisions: (1) the Commerce Clause, which grants Congress authority to “regulate Commerce … among the several States,” and (2) the Necessary and Proper Clause, which says Congress may “make all Laws which shall be necessary and proper for carrying into Execution” certain itemized grants—including the Commerce Clause.

In Gonzales, the court found that marijuana growing and use were economic activities. It then followed some 20th-century cases that (contrary to earlier rulings) allowed Congress to use the Constitution’s Necessary and Proper Clause to regulate economic activities with “substantial effects” on interstate commerce.

Was the court correct? Answering that question requires us to determine what the Constitution meant to those who adopted it. Even though the founders did not discuss marijuana specifically, a vast array of sources tells us their answer. The sources include debates from the Constitution’s framing and ratification, and writings informing us how key constitutional phrases were used in legal documents.

All students of the Constitution know it splits authority between the states and the federal government. What many do not recognize is that it deliberately divides responsibility for some closely-connected activities. For example, the founders often observed that commerce and domestic manufacturing were tightly related. Nevertheless, their Constitution granted power over several forms of commerce to Congress, but left authority over California cannabis manufacturing licenses to the State of California. The founders divided authority this way because protecting liberty was a higher priority than regulatory coordination.

So the Supreme Court is wrong to conclude that because an activity “substantially affects” interstate commerce it follows that Congress may regulate it. Many activities, economic or not, substantially affect commerce without being constitutional targets for Congress.

When the Constitution was adopted, the phrase “regulate commerce” was well-understood. It referred to laws governing mercantile trade and certain associated matters, such as tariff barriers, commercial finance, navigation, and marine insurance. It did not include other aspects of the economy. In fact, many of the founders are on record as specifically assuring the public that Congress would have no jurisdiction over agriculture, manufacturing, land use, or (according to Chief Justice Marshall) “health laws of every description.”

Growing marijuana is, of course, a species of agriculture. Processing is manufacturing. The ban on personal consumption is a health regulation. The Constitution places control over all those activities squarely within the state, not the federal, sphere.

So does Congress have any power over marijuana? Under a correct reading of the Constitution, the answer is, “Only some.” The Commerce Clause allows Congress to restrict or ban the marijuana trade across national and state boundaries. Moreover, the Necessary and Proper Clause recognizes some additional authority.

The background and history of the Necessary and Proper Clause establish that the provision is not a grant of authority to Congress, but merely a rule of interpretation. The Clause does, however, acknowledge Congress’s prerogative to pass certain laws “incidental” to regulating commerce. For example, if Congress prohibits interstate trade in marijuana, it might also require interstate shippers to disclose whether their cargoes included the substance—but only if disclosure is reasonably necessary to enforce the congressional ban.

However, incidental powers do not extend to comprehensive regulation of areas, such as agriculture or manufacturing, reserved to the states.

In sum: Under the original Constitution, as ratified by the American people, Congress may regulate, or even ban, marijuana from interstate and foreign commerce. It also may exercise some incidental authority. But it may not constitutionally regulate or prohibit in-state growing, processing, or use of marijuana. For better or worse, those are exclusive concerns of the citizens of the several states.

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New Cannabis Laws go into effect

Earlier this spring, the Department of Consumer Affairs’ Bureau of Cannabis Control, Department of Public Health and Department of Food and Agriculture released proposed regulations for the Medical Cannabis Regulation and Safety Act. These licensing authorities held public hearings and accepted written comments regarding the proposed regulations.

The Legislature passed and the Governor signed into law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act in mid-2017, which creates one regulatory system for both medicinal and adult-use cannabis.

The three cannabis licensing authorities are each developing new cannabis laws go into effect under proposed regulations based on the new law for the commercial medicinal and adult-use cannabis industries. During this process, the licensing authorities will consider the robust and valuable public comment received regarding the proposed medical cannabis regulations.

The licensing authorities will use the emergency rulemaking process for the new proposed regulations. The emergency regulations are expected to be published in fall 2017. The implementation date for the issuance of new cannabis dispensary laws go into effect for commercial cannabis licenses remains the same: January 2, 2018.

Medical Marijuana Licensing: At the state level, MCRSA establishes the legislative framework for state licenses, but California agencies still need to develop regulations to actually implement the law. January 2016: priority registration to demonstrate local compliance If your business is demonstrably “in operation and in good standing with [its] local jurisdiction by January 1, 2016” (AB 266, 19321), it will receive “priority” treatment during license applications. Note: “priority” is not defined. Even though this date has passed, establishing compliance remains important. September 2016: priority registration under AUMA Adult Use of Marijuana Act (Proposition 64) passed in November 2016, businesses that can demonstrate “that the applicant operated in compliance with the Compassionate Use Act and its implementing laws before September 1, 2016” shall receive priority in license issuance (Article 4, section 26045.2(a)) Again, “priority” is not defined.

Grower/Cultivator: This license is for entities that wish to grow medical marijuana plants from seed or clone to flower and finish. Growers wishing to provide clones, but who do not intend to flower or finish plants, may apply for a specialty nursery license.

To apply to grow cannabis in California, you will need to select a license based on your grow size and lighting source:

Tier 2: Small
• License 2: Small Outdoor. Between 5,001 and 10,000 sq ft of a canopy.
• License 2A: Small Indoor. Between 5,001 and 10,000 sq ft of canopy using exclusively artificial lighting.
• License 2B: Small Mixed-Light. Between 5,001 and 10,000 sq ft of canopy using a combination of natural and supplemental artificial lighting.

Tier 3: These licenses are limited in their access to vertical integration.
• License 3: Outdoor. Between 10,001 sq ft to one acre of canopy.
• License 3A: Indoor. Between 10,001 sq ft to one acre of canopy using exclusively artificial lighting.
• License 3B: Mixed Light. Between 10,001 sq ft to one acre of canopy using a combination of natural and supplemental artificial lighting.

License 4: Nursery.

Processor: This license allows business entities to process raw medical marijuana plant matter into a variety of medicinal products.

Processor licenses are sub-divided into two categories based on the types of solvent being used.
• License 6: Manufacturer 1. Not using volatile solvents.
◦ Legislators have stated License 6 was not intended for use by edibles manufacturers. This may be subject to cleanup language.
• License 7: Manufacturer 2. Using volatile solvents.

Additional license types currently in the law include:

Tester: Laboratories intending to test medical marijuana products for quality and potency will be required to apply for a tester license
• License 8

Dispensing: Businesses that intend to retail medical cannabis to qualifying patients will require a dispensing license under the new cannabis laws go into effect in 2018.
• License 10: one retail location
• License 10A: up to three retail locations and the potential for full vertical integration

Distributor: The MMRSA requires that—while business agreements can be made directly between any licensed entities—a third-party distributor be responsible for overseeing and officially conducting any business transaction that occurs. Distributors are required track all products received, and to have them tested for quality.
• License 11. All distributors must also apply for a Transporter License (12).
• From the legislative perspective, the inclusion of the “distributor” model was a necessary compromise to address the trust deficit with people who do not believe the cannabis industry is effectively and consistently self-regulating.

Transporter: Business intending to transport medical marijuana from one licensed facility to another.
• License 12

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Contact us for marijuana or cannabis licensing information or for legal help. As new cannabis laws go into effect, we will have updates on our website, and can also help you obtain licenses for your business.

DUI Blood Draws without a Warrant

Imagine this DUI arrest: A vehicle stop is made. The driver fails to pass the FSTs (field sobriety tests) and perhaps a PAS test as well. The driver is placed under arrest for DUI. Then the driver is told that the law requires he or she must undergo a chemical test, either blood or breath. The driver has no option other than to choose one and selects blood. On to the police station, they go where the blood is drawn. The BA is over .08. Criminal charges for DUI are filed.

If a lawyer were to challenge the blood testing and was to bring a motion to suppress the blood alcohol test results, often courts will cite the “implied consent law”, to deny relief to the person accused of a DUI.

Part of the reasoning for this is under the authority and legal reasoning of People v. Mason (2016) 8 Cal.App.5th Supp. 11. Because the blood draws under these routine facts are premised on “implied consent,” Mason shows that not only is “implied consent” a fiction and not really consent at all but that California’s statutes violate the Fourth Amendment in requiring warrantless blood tests in situations where an emergency circumstance does not exist.

As DUI case law in California, the Mason case is an Appellate Division case from Santa Clara. It is not binding on any court. However, it is persuasive authority and convincingly distinguishes an earlier and contrary ruling in the same county appellate division. (People v. Agnew (2015) 242 Cal.App.4th Supp. 1.) Mason follows the reasoning of People v. Harris (2015) 234 Cal.App.4th 671, discussed below. To summarize Mason’s excellent and comprehensive analysis:

“To recap, we have concluded that advance “deemed” consent under the implied consent law cannot be considered actual Fourth Amendment consent. We have also concluded that the scope of advance express consent under the implied consent law may not necessarily extend to Fourth Amendment considerations in a criminal prosecution, and that, in any event, no such advance express consent was shown here. Finally, we have concluded that, depending on the totality of the circumstances, a representation by an officer that submission to a chemical test is “required” under the implied consent law without reference to any of the consequences of refusal such that the substance of what is conveyed is that there is no actual choice to refuse may amount to a claim of lawful authority vitiating consent for Fourth Amendment purposes.” — (People v. Mason, supra at 31.)

It is always the burden of proof in a DUI for a prosecutor to establish that a defendant freely and voluntarily consented to the warrantless blood draw. Most times, there is no express consent given to a blood draw. Usually, the driver just submits to the order that he/she must take a blood or breath test. So, at the suppression hearing, the prosecution seeks refuge under the California implied consent law and argues that the advanced implied consent was provided through the licensing process, or failing proof of that, arguing that the statutes say if you drive, you consent.

In Mason, the prosecution never proved Mason was a California licensed driver which undercuts the argument that the licensing process told her she was providing consent to a blood or breath test. That teed up the Fourth Amendment issue versus the argument that if you drive in California you have consented to warrantless blood tests.

Consent and the Required Admonitions by the Arresting Officer

Many officers fail to comply with the directive of Vehicle Code § 23612, subdivision (a)(1)(D), which provides that the arrested driver “shall be told that his or her failure to submit to, or the failure to complete, the required chemical testing will result in a fine, mandatory imprisonment if the person is convicted of a violation of Section 23152 or 23153.” Additionally, the driver is to be told that there is a sanction of suspension of the driving privilege for one year for failure to submit to testing. Of course, if this required directive is given, it totally undermines the notion of free and voluntary consent to the chemical test, implied or otherwise. Consent is not free if produced by threats of criminal sanctions.

Where “the prosecution relies on consent to justify a warrantless search or seizure, it bears the ‘burden of proving that the defendant’s manifestation of consent was the product of his free will and not a mere submission to an express or implied assertion of authority. [Citation.]’” (People v. Zamudio (2008) 43 Cal.4th 327, 341.) When a driver submits to a claim of lawful authority (and the threat of imprisonment), this does not show free and voluntary consent. The circumstances are inherently coercive, thus vitiating consent. (E.g., Bumper v. North Carolina (1968) 391 U.S. 543, 548–549 [police told the homeowner they were conducting a search under a warrant—one that the prosecution declined to rely on; the assertion of authority vitiated the homeowner’s consent to search].)

Vehicle Code § 23612, subdivision (a)(4), provides that the officer “shall also advise the person that he or she does not have the right to have an attorney present before stating whether he or she will submit to a test or tests, before deciding which test or tests to take, or during the administration of the test or tests were chosen, and that, in the event of [a] refusal to submit to a test or tests, the refusal may be used against him or her in a court of law.” (Emphasis added.) This admonition at least hints that there is some choice in deciding whether to take or not take a test. In fact, in People v. Harris (2015) 234 Cal.App.4th 671, among other factors, this admonition helped convince the court that Harris actually consented to the chemical test.

While the failure of the officer to give the driver these mandatory admonishments will not amount to a constitutional violation, they are relevant in determining the issue of consent under the totality of the circumstances. (People v. Harris, supra at 689 [failure to disclose accurate information about potential legal consequences is a logical basis for an assertion of coercion].)

C. Without Consent, There is No Justification for a Warrantless Blood Draw Absent Exigent Circumstances. Unlike breath tests:

Fourth Amendment protections against illegal search and seizure are obviously implicated in a non-consensual blood draw. Taking blood from a person’s body for purposes of chemical testing is a search and seizure. (Missouri v. McNeely (2013) 569 U.S. ___; 133 S.Ct. 1552, 1558.) Searches and seizures performed ‘outside the judicial process, without prior approval by judge or magistrate’”—are per se unreasonable under the Fourth Amendment, subject only to “‘a few specifically established and well‑delineated exceptions.’” (Arizona v. Gant (2009) 556 U.S. 332, 338.) Exigent circumstance is an exception, but the dissipation of blood alcohol alone does not generally excuse the failure to obtain a warrant for a blood seizure. (Missouri v. McNeely, supra, 133 S.Ct. 1565.)

Typically, without a warrant or exigent circumstances, the prosecution falls back on implied consent to justify the blood draw. But there are now constitutional limits to what the Vehicle Code can authorize. In Birchfield v. North Dakota (2016) 136 S.Ct. 2160, 2185, the U.S. Supreme Court stated it “must address respondents’ alternative argument that such [blood] tests are justified based on the driver’s legally implied consent to submit to them.” The Court rejected that argument. While noting that civil penalties and evidentiary consequences are one thing (i.e., probably permitted), “[t]here must be a limit to the consequences to which motorists may be deemed to have consented by virtue of a decision to drive on public roads.” Civil sanctions for blood test refusals may be legal, but the State cannot mandate unconsented blood extractions for criminal purposes: “[W]e conclude that motorists cannot be deemed to have consented to submit to a blood test on pain of committing a criminal offense.” (Birchfield, supra at 2185‑2186.) Thus, Birchfield disapproved of laws imposing criminal penalties for refusing to take a blood test. (Ibid.)

California law says if you drive in California you are deemed to consent to chemical testing. Vehicle Code § 23612 (a)(1)(A) states: “A person who drives a motor vehicle is deemed to have given his or her consent to chemical testing of his or her blood or breath for the purpose of determining the alcoholic content of his or her blood….” But People v. Mason (2016) 8 Cal.App.5th Supp. 11, answered the argument that this statute permitted warrantless blood draws in criminal contexts: “whatever effect advance ‘deemed’ consent may have under the implied consent law in the administrative context, that law does not make the results of a chemical test admissible in a criminal prosecution, without a warrant or proof of circumstances establishing an exception to the warrant requirement. Nor does it even purport to.” (Id. at 29.) And Birchfield notes that there are limits on what the State can require of a citizen for the privilege of driving. Giving blood is one of them.

In the wake of McNeely and Birchfield, California’s implied consent law must be interpreted to comply with federal constitutional principles. The implied consent statute, Vehicle Code § 23612(a), if interpreted to permit warrantless blood draws, conflicts with McNeely and Birchfield, and the Fourth Amendment. To avoid that conflict, the statute must be interpreted to require one of three conditions before blood may be drawn from an arrestee, i.e., either case‑specific exigent circumstances (McNeely), a valid consent (not the legal fiction of implied consent), or a valid search warrant. Absent one of those exceptions, the arrestee is not legally required to submit to a blood draw. Any blood draw compelled outside these exceptions without a warrant is violative of the Fourth Amendment and should be ordered suppressed.

Why Proof of the Driver’s License May is Important to the Consent Issue.

Calif. Vehicle Code § 13384 requires renewals for licenses to consent in writing to give chemical tests when requested by an officer: “(a) The department shall not issue or renew a driver’s license to any person unless the person consents in writing to submit to a chemical test or tests of that person’s blood, breath, or urine pursuant to Section 23612, or a preliminary alcohol screening test pursuant to Section 23136, when requested to do so by a peace officer.

All application forms for driver’s licenses or driver’s license renewal notices shall include a requirement that the applicant sign the following declaration as a condition of licensure: ‘I agree to submit to a chemical test of my blood, breath, or urine for the purpose of determining the alcohol or drug content of my blood when testing is requested by a peace officer acting in accordance with Section 13388 or 23612 of the Vehicle Code.’”

Whether this forced consent will survive the crucible of litigation in a criminal case (is this voluntary consent?), remains to be seen. (See People v. Mason, supra at 26-27, doubting the sweep of the statute to overcome constitutional protections [“the scope of [section 13384 ] which we would still doubt as automatically encompassing Fourth Amendment rights and concerns that lie beyond the over‑the‑per‑se‑limit administrative and evidentiary consequences provided in the implied consent law itself”].)

It will be an easier defense argument where the prosecution fails to introduce evidence of the license, or a renewal, as happened in Mason. But even if introduced by proof of the signed consent on a license renewal (and make sure they produce evidence[1] of both), there are good arguments that a section 13384 “consent” was coerced by the threat of depriving a citizen of his/her fundamental right to travel. (See case citations on this point in Mason, supra at pp. 24-25.)

“In short, it is not real or actual consent in fact for purposes of the Fourth Amendment, though it may be perfectly fine for purposes of administrative proceedings involving forfeiture of driving privileges under the implied consent law upon a refusal to submit to a duly requested chemical test.” (Id. at 27-28.)

This area is obviously ripe for litigation within suppression challenges and may ultimately have to be resolved by the U.S. Supreme Court.

Marijuana Tax Act and Federal Law

Marijuana Tax Act and Federal Law – Eighty years ago this month, in August, 1937, President Franklin D. Roosevelt signed House Bill 6385: the Marijuana Tax Act (spelled at the time “The Marihuana Tax Act), into law. The Act for the first time imposed federal criminal penalties on activities specific to the possession, production, and sale of cannabis.

Congress’ decision in the Marijuana Tax Act and Federal Law followed the actions of 29 states, beginning with Massachusetts in 1914, that had previously passed laws criminalizing the plant over the prior decades. It also followed years of ‘Reefer Madness,’ during which time politicians, bureaucrats (led primarily by Federal Bureau of Narcotics Director Harry Anslinger), reporters, and science editors continually proclaimed that marijuana use irreparably damaged the brain. A 1933 editorial in the Journal of Criminal Law and Criminology largely summarized the sentiment of the time, “If continued, the inevitable result is insanity, which those familiar with it describe as absolutely incurable, and, without exception ending in death.”

On April 14, 1937, Rep. Robert L. Doughton of North Carolina introduced HR 6385, which sought to stamp out the recreational use of marijuana by imposing a prohibitive federal tax on all cannabis-related activities. Members of Congress held only two hearings to debate the merits of the bill, which largely relied on the sensational testimony of Anslinger — who opined, ”This drug is entirely the monster Hyde, the harmful effect of which cannot be measured.” Over objections from the American Medical Association, whose representatives opposed the proposed federal ban, members of the House and Senate overwhelmingly approved the measure by voice votes.

President Franklin Roosevelt promptly signed the legislation into law and on October 1, 1937, the Marihuana Tax Act officially took effect — thus setting in motion the federal prohibition under the current Marijuana Tax Act and Federal Law that continues to this day.

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